Tech giants Apple and Qualcomm had just begun trial last week when they announced an agreement to dismiss all lawsuits worldwide. Details of the settlement are scarce, but the deal includes Apple paying unspecified royalties for the use of Qualcomm’s patented mobile chip technology for the next six years. Qualcomm will continue to supply Apple with mobile chips for its iPhone products.
Disputes over patent royalties
Apple’s dispute with Qualcomm began with a challenge to royalties Qualcomm charged on nearly every smartphone on the market. Qualcomm was a pioneer of cellular communications technology in the 1990s, leading them to make sweeping royalty demands based on their patents. Apple contended that Qualcomm used its prominent position in the market to impose excessive royalty and licensing terms and undermine competitors.
The U.S. Federal Trade Commission filed a case against Qualcomm in January of 2017 based on contentions by Apple of unfair trade practices. It wasn’t long before Apple filed its own lawsuit against Qualcomm.
The end of a worldwide battle
Since Apple’s initial suit in 2017, the two companies have litigated versions of this dispute on three different continents. In January 2019, a German court dismissed a patent infringement suit by Qualcomm that Apple representatives called an effort to “divert attention from their illegal behavior.”
But, Apple wasn’t so lucky in every case. Japan’s Fair Trade Commission recently dropped all challengesagainst Qualcomm’s wireless licensing model. Differing results across the world, paired with the expense of managing lawsuits spanning multiple continents, contributed to Apple and Qualcomm’s option to settle.
Some are calling the settlement a win for intellectual property owners and the U.S. patent system. Others view Qualcomm’s licensing demands as a continuing problem for competition. Either way, the deal struck between Apple and Qualcomm will likely have an impact on the market at large and future IP disputes across the world.